The Bank of Ireland´s collapse proves that last year´s stress tests were accurate. Now, the new European banking regulator, the EBA, has decided to stiffen the tests for Spanish banking entities.
It will not take into account some provisions such as Spain´s anticyclical measures that absorb losses directly.
This treatment feels like an injustice, particularly because Spain practices stiffer risk management than Germany. And we are less exposed to problems with Greek sovereign debt or credit default swaps than they are.
This lack of homogeneity also could diminish credibility for them, especially if we take into account that the Germans were financing national budgets for peripheral countries.
